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Stock Market News For Jul 26, 2019

Zacks Equity Research

Markets closed sharply lower on Thursday after a spate of weak corporate earnings dented investors’ sentiments. Further, ECB president Mario Draghi’s comments on the future of monetary policies in the eurozone also weighed on the broader markets. The three major benchmarks ended in the negative territory.

The Dow Jones Industrial Average decreased 0.5%, to close at 27,140.98. The S&P 500 decreased 0.5% to close at 3,003.67. The tech-laden Nasdaq Composite Index closed at 8,238.54, losing 1%. The fear-gauge CBOE Volatility Index (VIX) increased 4% to close at 12.55. Decliners outnumbered advancers on the NYSE by a 2.34-to-1 ratio. On Nasdaq, a 2.14-to-1 ratio favored declining issues.

How Did the Benchmarks Perform?

The Dow dipped 129 points to close in the red after shares of Boeing BA dipped 4% and weighed on the 30-stock index. The stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Boeing Company incurred adjusted loss of $5.82 per share for second-quarter 2019 against the year-ago quarter’s earnings of $3.33. This year-over-year downside was primarily on account of the $4.9 billion charge in relation to the grounding of 737 Max jets and its delayed delivery. (Read More)

The S&P 500 dropped 15.9 points to end in negative territory. All of the 11 major sectors of the S&P 500 ended in the red, with energy stocks leading the advancers. The Energy Select Sector SPDR Fund (XLE) decreased 1.2% on Thursday.

Meanwhile, the Nasdaq slid 83 points to also close in the red and posted its biggest single-day decline since Jun 25.

ECB Keeps Rates Unchanged, Opens Doors for Future Rate Cuts

The European Central Bank’s (ECB) outgoing president Mario Draghi announced in a press conference on Jul 25 that the central bank would adopt easing measures to stimulate the region’s economy. Further, the ECB also announced that it would keep official interest rates at “present or lower levels,” at least through the first half of next year.

Draghi also announced that “a significant degree of monetary stimulus” is required to “support the euro area expansion.” Further, the central bank said it might also adopt additional measures to stimulate the region’s economy. Such measures might include designing of a tiered system for reserve remuneration as well as “options for the size and composition of potential new net asset purchases.”

The ECB also hinted toward the reintroduction of the quantitative easing program in the months to come. Meanwhile, market watchers believe that the ECB would cut the deposit rate to -0.5% at its upcoming meeting in September.

Such developments led to speculations that the Federal Reserve might now adopt a less aggressive approach toward reducing the benchmark interest rate.

Economic Data

On the economic data front, durable orders for June increased 2%, surpassing the consensus estimate of an increase of a meagre 0.7%. Meanwhile, initial jobless claims fell to its near historic lows to 206,000 in the last week.

Stocks That Made Headlines

Fiserv Surpasses Q2 Earnings and Revenue Estimates

Fiserv, Inc. FISV reported solid second-quarter 2019 results, wherein the company’s earnings and revenues beat the Zacks Consensus Estimate. (Read More)

Republic Services Beats on Q2 Earnings, Lags Revenues

Republic Services Inc. RSG reported mixed second-quarter 2019 results wherein earnings surpassed the Zacks Consensus Estimate but revenues lagged the same. (Read More)

Starbucks Stock Up on Q3 Earnings Beat & Raised View

Starbucks Corporation SBUX reported third-quarter fiscal 2019 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. (Read More)

Alaska Air Q2 Earnings Surpass, Q3 RASM View Upbeat

Alaska Air Group, Inc. ALK delivered second-quarter 2019 adjusted earnings per share which beat the Zacks Consensus Estimate (Read More)

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